New Jersey’s state Senate president says the new Revel casino’s finances are “dire” and that he fears Atlantic City’s newest resort could fail.
Sen. Stephen M. Sweeney, D-Gloucester, says Revel owes $12 million in unpaid taxes to Atlantic City, which had planned a tax sale to recoup the money. He’s also concerned about contractors and vendors who still haven’t been paid eight months after the casino opened.
Sweeney wrote Friday to David Rebuck, director of the state Division of Gaming Enforcement, asking for a detailed report on Revel’s finances within a week.
During the summer, Sweeney wrote a similar letter to the division and was assured the state is keeping a close eye on all the casinos’ finances.
“Since your letter, I have received a number of additional reports that Revel’s finances have deteriorated considerably and that the situation has become dire,” Sweeney wrote in Friday’s letter to Rebuck. “The casino appears to be burning cash at an alarming rate.”
Revel received a $100 million line of credit in August to help it operate through 2013.
“I understand that these funds have evaporated and that the casino has reached out to secure additional funding to survive through the end of the year,” Sweeney wrote.
Lloyd Levenson, Revel’s attorney, said the casino and the city both agreed to negotiate a settlement of three tax cases brought by the casino that challenges, among other things, the $2.4 billion assessed value Atlantic City has placed on Revel.
Asked how much the casino thinks it should be assessed at, Levenson would only say, “A lot less.”
A joint statement issued Friday by the city and Revel said both sides hope to reach an agreement next month on Revel’s true tax debt. Atlantic City is issuing $100 million in bonds this year for such refunds; last year’s total was an additional $35 million in refunds.
Sweeney said he continues “to receive a flood of reports that (Revel’s) creditors are still waiting to be paid for services rendered. I believe that serious attention to this issue is necessary to ensure that Revel’s failures do not jeopardize the businesses that acted in good faith to provide various services to the casino. No business can afford to sit around and wait to be paid in this fragile economy.
“The consequences of the casino’s collapse could have serious consequences for the region and the taxpayers, especially in light of the impact of Hurricane Sandy,” Sweeney wrote. “I refuse to stand by and simply hope that the Revel will decide to meet its obligations .”
In terms of gambling revenue, Revel has been mired near the bottom of Atlantic City’s 12 casinos since opening in April.
Revel says it is less dependent on gambling revenue than other casinos, but during the third quarter of this year, it reported a nearly $37 million gross operating loss.
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